War-Time Financial Problems eBook

There has been little serious criticism of these changes
in taxation except that many people, who seem to regard
the penny post as a kind of fetish, have expressed
regret that the postal rate of the letter should be
raised to 1-1/2 d. This addition seems to me to
be merely an inadequate recognition of the depreciation
of the buying power of the penny and to be fully warranted
by the country’s circumstances. Either
it will bring in revenue or it will save the Post Office
labour, and whichever of these objects is achieved
will increase the country’s power to continue
the war. The extra penny stamp on cheques has
been rather absurdly objected to as being likely to
increase inflation. Since the effect of it is
likely to be that people will draw a smaller number
of small cheques, and will make a larger number of
their purchases by means of Treasury notes, the tax
will merely result in the substitution of one form
of currency for another, and it is difficult to see
how this process will in any way increase inflation.
Other arguments might be adduced, which make it undesirable
to increase the outstanding amounts of Treasury notes,
but in the matter of inflation through addition to
paper currency, it seems to me that the proposed tax
is entirely blameless. The increase of a shilling
in income tax and super-tax produced a feeling of
relief in the City, being considerably lower than
had been anticipated. It is hardly the business
of the Chancellor of the Exchequer in this most serious
crisis to produce feelings of relief among the taxpayers,
and it seems to me a great pity that he did not make
much freer use of these most equitable forms of taxation,
having first made arrangements (which could easily
have been done) by which their very severe pressure
would have been relieved upon those who have families
to bring up. Death duties, again, he altogether
omitted as a source of extra revenue. His proposed
luxury tax he has left to be evolved by the wisdom
of a House of Commons Committee, and has thereby given
plenty of time to extravagantly minded people to lay
in a store of stuff before the tax is brought into
being.

Space will not allow me to deal fully with the Chancellor’s
very interesting analysis of our position as he expects
it to be at the end of the financial year on the supposition
that the war was then over. He expects a revenue
then of L540 millions on the present basis, making,
with the yield of the new taxes in a full year, L654
millions in all, without including the excess profits
duty, and he expects an after-war expenditure of L650
millions, including L50 millions for pensions and
L380 millions for debt charge. It seems to me
that his expectation of after-war revenue is too high,
and of after-war expenditure is too low. He says
that the estimates have been carefully made, but that
they include “a recovery from the absence of
war conditions,” but surely the absence of war
conditions is much more likely to produce a diminution